That responds to a statement made in my reasons delivered this morning, where I made that assumption. That statement in the affidavit gave rise to some concerns during the course of the submissions this evening. I asked counsel for Mr Lombe to indicate what quantum of debts might fall within the category of unsecured creditors whose debts became payable prior to 29 April. Before that question was answered, I asked the Commonwealth whether the arrangements it proposed would extend to cover those unsecured creditors, indicating that I was concerned that there may be some unfairness if the arrangements did not so extend. During the course of submissions I received several inconsistent answers on behalf of the Commonwealth to that question.
19 At one stage I was told that the arrangements would cover such a person, on the basis that a debt would remain properly payable after 29 April if it had become properly payable before that time. Then I was told that unsecured creditors in this category may or may not be covered but that the issue ought not to concern the Court. I made it plain that I was concerned because of a question of fairness. And then finally I was told that the arrangements did not extend to unsecured creditors in this category. (I should note that there was never any doubt that the arrangements would cover a number of specific cases identified in Confidential Exhibit AX1, where unpaid cheques were pending on 29 April 2002.)
20 That dismal outcome led me to adjourn for the parties to consider their positions. When the hearing resumed, counsel for the provisional liquidator informed me that, in effect, I need not be concerned about the issue because it was of no practical significance. He said that paragraph 6 of the affidavit was not intended by Mr Lombe to convey that there was any likelihood of there being unsecured creditors whose debts became payable prior to 29 April in the nature of insurance claimants whose debts had not been paid. Rather Mr Lombe had in mind categories of unsecured creditors set out in the annexure to the affidavit whose claims by their nature accrue over time, such as sundry creditors, claimants in respect of long service leave and the like.
21 As far as claims outstanding prior to 29 April were concerned, counsel for Mr Lombe informed me that Mr Lombe could not eliminate the possibility that there may be some undetected outstanding claims which became payable prior 29 April, but he understood that it was the policy of the companies to pay claims within 28 days and that efforts were made to bring claims payments up to date before the application for provisional liquidation was made. Therefore there may be isolated cases which may have been overlooked but as far as Mr Lombe could tell, the issue was not of any practical significance to the interim arrangements subject to the application.
22 It is on that express basis that I proceed to consider the applications. It does seem to me, however, that if there were any substantial claims which became payable prior to 29 April 2002 in the ordinary course but which have been for some administrative or other reason overlooked, there would be some real injustice in the Commonwealth not agreeing to extend its arrangements ad hoc to any such matters when identified. I make that observation not as a ground for refusing the present application but in the hope that, in evolving and difficult circumstances, sensible arrangements can be made where appropriate by way of supplement to what is now proposed.
23 Mr Lombe's affidavit also gives information with respect to other creditors along the lines requested by me. It is not easy to give an accurate estimate at this stage of the quantum of liabilities that may arise in respect of events that have occurred prior to 29 April which lead to payments becoming due after 30 June, say in the ensuing three months. But clearly in any period of three months after 30 June the total quantum of claims will be substantial. Claimants in that category are not covered by the present arrangements.
24 I do not propose, given the lateness of the hour, to review the authorities with respect to the making of orders under s 477(2B) and 479(3). Having considered the law last night, however, I am satisfied that the Court has the power to make, in the case of a provisional liquidator such as Mr Lombe, orders both under ss 477(2B) and 479(3), although the position with respect to s 479(3) is less clear than in relation to s 477(2B).
25 As to s 477 (2B) it is clear that this provision applies when a company is in provisional liquidation: s 472 (5). The principles to be applied to an application for approval under s 477 (2B) have been canvassed in many cases. Some of the more helpful in the present circumstances, to which I have had regard, are: Re Rothwells Ltd [1990] 2 Qd R 181; Newmont Pty Ltd v Laverton Nickel NL [1978] 2 NSWLR 325; Re HIH Casually & General Insurance Ltd [2001] NSWSC 1186 (19 December 2001); Re FAI General Insurance Co Ltd [2001] NSWSC 882 (26 September 2001); Re HIH Overseas Holdings Ltd [2001] NSWSC 426 (16 May 2001); Re HIH Insurance Ltd [2001] NSWSC 308 (23 April 2001); and Registrar of Aboriginal Corporations v Bibelmen Mia Aboriginal Corporation [2001] FCA 136 (23 February 2001).
26 As to directions under s 479 (3), it is not entirely clear that this section is available in the case of a provisional liquidator, as opposed to a liquidator after a winding up order has been made. The word "liquidator" is defined in s 9 of the Corporations Act to include a provisional liquidator in Chapter 7, but not generally in Chapter 5. Section 472 (6) states that the exercise by a company's provisional liquidator of his or her statutory powers is subject to the control of the Court, but it confers standing, to apply with respect to the exercise or proposed exercise of any of those powers, on a creditor or contributory or ASIC but not the provisional liquidator. However, the Court has inherent jurisdiction to provide directions to an official liquidator appointed as provisional liquidator, because an official liquidator is an officer of the Court: see Re PR Clark Holdings Pty Ltd (1977) 2 ACLR 416, 418-19; Re Rothwells Ltd [1990] 2 Qd R at 186 (quoting from Palmer's Company Precedents (17th ed, 1960) Part 2 page 103). Therefore I am satisfied that I have the power to give directions to Mr Lombe as provisional liquidator, on his application, either under s 479 (3) or in the exercise of the Court's inherent jurisdiction. Of course, directions of the kind that I shall give to Mr Lombe have the relatively limited significance described by McLelland J in Re G B Nathan & Co Pty Ltd (1991) 24 NSWLR 674; see also Bastion v Gideon Investments Pty Ltd (2000) 35 ACSR 466.
27 After so much analysis and with the assistance of the supplementary information provided this evening, which I regard as essential, I am able to conclude that the making of the orders sought in the interim applications is appropriate having regard to the interests of the companies in provisional liquidation, their members and creditors, and to the extent that the Court is permitted to take such considerations into account, the interests of the public at large.
28 The Government's arrangements were announced, as the evidence indicates, to provide some comfort to medical practitioners who are members of UMP so that they would have a measure of protection, notwithstanding the difficulties that the UMP Group had encountered, if they were to continue to practise up to 30 June 2002.
29 I cannot think of any plausible argument for saying that such arrangements would not be interests of the members of the holding company who are the medical practitioners concerned. Considering their position purely as members, it seems to me that the arrangements are at worst neutral. If the companies are wound up, the arrangements will have the effect that some unsecured creditors will have been paid and the others will be in no worse position than they would have been in if the arrangements had not been adopted. Therefore the arrangements cannot impact on the interests of members.
30 On the positive side, to the extent that the arrangements encourage medical practitioners to continue with their practices and to continue with their financial and other involvement with the UMP Group, they tend to enhance the prospects (such as they may be) that the companies in the UMP Group may be able to continue.
31 I have dealt, I hope exhaustively, with the position of the unsecured creditors, both those who receive benefits under the arrangements and those who do not. It is precisely because of the revisions made this evening to the Commonwealth's arrangements that I am able to say, in the end with some confidence, that the arrangements will not prejudice the interests of any unsecured creditors, including any claimants under insurance policies whose claims are not supported by the arrangements.
32 Finally, I have some remarks to make about the way in which this matter came before me. As I have said, the provisional liquidator acted with all due haste in bringing the applications as soon as the letters of comfort were received. I think any objective observer would acknowledge that the Court has also acted with all reasonable expedition in reaching a decision on these matters. In the course of submissions this evening, I was informed that if I did not make my decision this evening there was risk that medical practitioners would go on strike. Pressure of this kind, seeking to induce the Court to reach a decision that it would not otherwise reach on a proper consideration of all relevant facts and circumstances, is to be deplored. I do not say for a minute that counsel who informed me of that possibility, or his client, is open to criticism for that reason. I do say, however, that in any application of his kind, it is essential for the Court thoroughly to explore the issues and reach its conclusion on a measured and balanced basis without being suborned by pressure of that kind. It is a pity, looking at the events as they have unfolded, that it became necessary for the applications to be made so many weeks after the original announcements were made. But there is no evidence as to the reasons for the delay and I am prepared to assume that there were some acceptable reasons for that to occur.
33 I would certainly encourage the provisional liquidator in this case and indeed in any other case where circumstances of urgency are emerging to endeavour to keep the Court fully informed at the earliest possible time, to avoid where possible the necessity for matters to be dealt with at such an accelerated pace.